Secrétaire général

Launch of the 2012 Development Co-operation Report “Lessons in linking sustainability and development”

Remarks by Angel Gurría, Secretary-General OECD

London, 4 December 2012

(As prepared for delivery)

Distinguished Ministers, Heads of Agency, Dear Colleagues,

I am delighted to welcome you to this High Level Meeting of the DAC – one of the OECD’s longest-standing Committees. Let me express special thanks to the UK Government for hosting us today. This is another expression of UK’s leadership in development policies.

This gathering offers a timely opportunity to pay tribute to the outstanding work of Brian Atwood since he took over the DAC Chair just two years ago. He has steered us brilliantly through a sea of change in development co-operation, opening up discussions beyond DAC members and charting challenging issues that affect both development co-operation and policies beyond aid, emphasising the focus more on development outcomes.

Many of us were in Busan last year, at the landmark High Level Forum that moved us from working party mode to a Global Partnership -- from aid effectiveness to development effectiveness. Today, we will discuss what has been achieved since Busan, and what we can do to join other partners in supporting the UN’s post-2015 development agenda’s preparatory process.

In doing so, we should keep in mind that in 2012 we adopted the OECD Strategy on Development to enhance its contribution to development overall, to strengthen evidence-based dialogue and knowledge sharing, and to mainstream development in all strands of OECD’s work.

Today, the OECD works with many developing country partners – from fragile states and low-income countries to emerging-market economies. Our focus is not only on development co-operation, but also on a range of areas of public policy, from education and skills development to taxation, investment and infrastructure.

As suggested in the Development Co-operation Report we are launching today, we are working to ensure that sustainable development and inclusive, green growth remain centre- stage in everything we do. We cannot afford to do otherwise.

Sluggish growth, stretched public finances, high levels of unemployment and growing inequalities mean that it is not easy to keep our development commitments. Actually, it is unfortunate that ODA declined by 2.7% in 2011, stalling the upward trend since 1997. Thus, we must double our efforts and maintain our commitments to the poorest. This is possible. The UK is doing so, even in the context of an extremely demanding adjustment process.

It is not easy to keep environmental protection, conservation and natural resource efficiency at the top of the policy agenda. Yet, the planet’s ability to support sustainable livelihoods and development for a fast growing population is at risk. We are on a collision course with nature!

OECD’s Environmental Outlook paints a grim picture of the Earth if we do not change our policies and our behaviour. By 2050, 40% of the world’s population will live in severely water-stressed areas, the number of premature deaths from air pollution could triple to 3.6 million per year globally, and biodiversity is projected to decrease by an additional 10%. The adverse impacts of climate change will be disproportionately experienced in the developing world, challenging or setting back the hard-won development achievements such as improved access to energy, clean water and sanitation, and food security. As they become more recurrent and acute, climate change related events are also becoming increasingly costly. Richer countries are expected to provide USD 100 billion per year in funding for climate change. Green growth solutions will be key to ensuring that the funds are used effectively.

In the context of this dire outlook, in 2011, the OECD Council endorsed the Green Growth Strategy. We are now looking at how green growth can be applied in practice in developing countries, and we have actually made good progress on the Toolkit that we developed in the G20 context with other international institutions.

In 2013, we will issue a new report on “Green Growth and Developing Countries”, in which special attention will be paid to inclusive green growth seen from a developing country perspective.

The message is clear: developing countries can reap clear economic and social benefits when embarking on a green growth path. We often hear that developing countries cannot afford to go green. “Develop first and clean up later”, some people say. It is true that the economic returns from greening growth are not always immediately evident, and at least the perception of trade-offs can be considerable. Yet poor people in developing countries are particularly vulnerable to environmental degradation as their livelihoods are frequently dependent on agriculture and other natural resource use. Remember: natural capital comprises 25% of total per capita wealth in low income countries, as compared to 2% in OECD countries.

Harnessing natural resources for poverty alleviation and for new growth opportunities through technology transfers and energy efficiency should be key elements of an inclusive green growth strategy in developing countries. In Africa and Asia, the use of green farming methods, such as agro-forestry, water harvesting and integrated pest management, has resulted in productivity increases of 59% to 179%. It estimated that for every 10% increase in farm yields, there has been a 7% reduction in poverty in Africa and more than 5% in Asia.

The Development Co-operation Report being launched today offers concrete examples of successful paths which developing countries and their partners are finding to green their growth while promoting development that is sustainable and inclusive. The case study in Ethiopia on integrated watershed management is an excellent example of how projects can be scaled up to become a part of a national strategic approach to food security. In this case, supporting up to 8 million people every year, i.e. almost 10% of the total population!

These results build on a long history of solid contributions from the DAC and the many different OECD areas involved with it. Since the mid 1980s, the OECD has provided policy guidance on the environmental assessment of development assistance projects, advanced tools for strategic environmental assessment, climate change adaptation and development planning.

Mobilising – and leveraging – private investment is essential to the long-term financial viability of green development. According the IEA, limiting climate change to 2 degree Celsius will require an increase in annual capital investment for infrastructure from USD 4.95 trillion a year for this decade to USD 9.54 trillion a year for 2031-50. We need to be prepared to meet the challenges!

I invite you and your agencies to use the evidence in the 2012 Development Co-operation Report being launched today to strengthen sustainable development and inclusive green growth in your development co-operation programmes. It will be an act of intergenerational responsibility; it will be good for the environment; it will be good for growth.